Christopher Leady
Head of Learning and Development
Campbell Soup Company
KS: In your opinion, what are the main drivers for the evolution of performance management?
CL: In my opinion, there are several drivers behind the evolution of performance management.
These drivers range from economic conditions, market competition, changing
consumer demands and cost containment; all of which place external pressures on today’s business’ to deliver higher levels of performance. If you look at the overall business landscape from a Consumer Product Goods (CPG) perspective, the industry continues to grow, however with consumer spending down the pace has slowed, offset by advancements in technology and solid innovation. The average number of retail outlets in the U.S. in which consumers are shopping, is declining and leading to grocery consolidation. Because of smaller, "challenger brands" eroding market share, consumer demographics and demands continuously shifting, and ingredient costs continuously on the rise, SG&A expenses need to be managed tightly. The accumulation of these external pressures alone should be enough to push companies to think about ways they can deliver stronger performance. External drivers aren’t the only factors demanding change – pressure is building on the inside of organizations as well.
From a generational and societal perspective, today’s workforce poses a greater impact on the evolution of performance practices than ever before. Employees want and expect more; more feedback, more coaching, more development and more attention, all on a more regular (quarterly, weekly, even daily) basis. Such pressures from the evolving workforce are influencing the ways that organizations are designing performance structures. These changes include making performance structures more fluid and flexible, feedback oriented, socially collaborative, technology driven and label-free. The "burning platform" for changing performance management is a reality. Research from a number of organizations, including Deloitte and Corporate Executive Board, tell us that less than 10% of people find performance management to be a good use of time. Managers, employees and CHRO’s alike are frustrated with a broken system in which widespread ranking and ratings-based performance management damages both employee engagement and performance, while adding little to no value to the business.
KS: I can understand that need. Everyone wants to know how they are doing. A quarterly review can go well and then you move onto another project and it suddenly it is midway through the new quarter and you’re left wondering, am I on track? I think it’s wonderful that you all recognize that need.
CL: We definitely recognize it. We really need to capitalize on it too. It’s funny; we recently had a meeting with our manufacturing HR leaders about performance management. The culture within manufacturing is amazing. Every time a shift changes or every time a new shift starts, they have a huddle with the team manager. It’s instantaneous feedback.
If you think about the manufacturing environment, nothing can go wrong on the line otherwise it has huge ramifications from a downstream perspective. There is a need for real-time, live, spontaneous feedback. It’s a Facebook, Twitter and Instagram world, where society and technology are both influencing feedback, performance management and company cultures as a whole.
KS: Absolutely. It is instantaneous. We have become used to posting something and somebody else commenting on it almost instantly, so I suppose we kind of expect that to make its way into jobs too.
What are some of the ways that performance management is becoming an integrated part of talent management?
CL: When I think about talent management overall, it’s the entire employee lifecycle. It starts from the time that we are attracting and onboarding top talent, to retaining high performers, developing high potentials, and providing our broader population with the capabilities, experience and opportunity to grow their careers. Performance management
should be a core process at the heart of talent management because it gives structure to:
1. Aligning people and purpose to drive business strategies.
2. Elevating coaching and feedback conversations as a driver of individual and business performance.
3. Motivating and inspiring great outcomes.
4. Differentially assessing and rewarding contributions.
I view performance management as a business process, much like strategy planning, developing annual operating plans, maintaining budgets and running a P&L. Its part of leading a business and the goal is to leverage human capital to drive greater outcomes and results.
KS: It’s a matter of keeping that talent in the right places and developing it at the right pace to keep the organization going and to serve the business in the best possible way. You mentioned a lot about learning, what do you feel makes a great learning experience?
CL: For me, a great learning experience is first of all: relevant. Relevant to what you want to learn and relevant to how the learner wants to learn it. Second, a great learning experience should be real life, pragmatic and easy to apply. The third trait of a great learning experience, especially in today’s world, would be that it is digestible or "bite-sized". Less and less people are learning by sitting in a class for eight hours a day; day after day. Bite-sized, blended, real-time, "YouTube like" on demand learning approaches and self-paced socially collaborative approaches are engaging people in the ways that they want to be engaged. The results of a great learning experience should be an experience that stretches someone to grow, learn and apply something; while making them feel good about themselves.
KS: I agree. I think that something that interests someone is much easier to learn and retain. For what you were saying about the 8 hours in a classroom, I think that there’s often such a broad approach in those situations that it only engages a portion of the class. If it’s an audio or a visual class full of kinesthetic learners, those people are being left out. I think that it is great that your organization is using such multifaceted approaches to learning.
CL: We definitely are. The way that people learn is evolving and I think that the way we think about learning is really changing too. I think a great learning experience is one that not only helps people prepare for what they need to do today, but is also going to give them what they need to take on tomorrow. It really helps build capabilities and skills not
only for today, but for the future as well. Otherwise, it is like running on a treadmill where you are constantly running but not getting anywhere.
So how do you really amplify your own success?
Learning can’t be an event – it’s a behavior change. Creating learning that transfers is a critical component in making learning stick. We need to put the learners—not the event—at the center of our thinking and design experiences that maximize the chances of the learners actually putting new skills into action. Rather than thinking about the stages before, during, and after an event, we should focus on what we want the learners to do at each stage of a learning cycle. The desired actions include engaging in the content, participating in the learning, and then activating new behaviors.
KS: Great point. Before I went the advertising track in college, I was actually studying chemical engineering. Today, I could not tell you a single complex chemical structure or reaction formula, but I learned them at some point. If you don’t use it, you lose it.
CL: I think sometimes it’s about taking your ‘learner hat’ off and just experiencing life in the way that people actually think about things. It’s like watching a YouTube video or turning to Google when you need to fix a lawn mower or something around the house. People learn best in small bites and when the information can be directly applied. Thinking about life experience and how people learn is really how we should begin to direct learning.
KS: That is a perfect example. If the person watches the video on fixing a mower, say 6 months prior, he or she won’t have any interest in it at that moment and the information may not have been retained. That’s a great way to think of learning.
You touched on this a bit previously, but what are your thoughts on the current performance ratings and evaluations?
CL: I think it goes back to the statement about performance management is broken and the fact that everyone realizes it. Even my organization is actively evolving our performance approach. Traditional approaches to performance management are antiquated. Recently, there were a few articles highlighting two big companies that are totally transforming their approach to performance management.
One of those was GE. GE is kind of the grandfather of performance ratings, force distribution and cutting out the bottom ten percent. Many companies follow the GE model because:
1. It drove results for GE at the time.
2. It aligned with many managerial philosophies of the given era.
3. There were little to no other alternatives to follow.
In a recent article by Fortune Magazine, GE announced that "the rank and yank systems that Jack Welsh popularized resulted in workers pitting against their peers to avoid being labeled as losers…and "That’s not the kind of approach that encourages teamwork". GE is transforming its entire approach to performance management and looking at it in a different way. In another recent article from Harvard Business Review, Accenture was cited as "reinventing" performance management. In speaking with Accenture’s Head of Talent, I learned that it is making the shift because for its 330,000 staff members, performance management is described as being too time-consuming, expensive and generally ineffective. Performance management is about people and should take a more people-centered approach. Process, technology, forms, ratings, etc.; should be enablers, not barriers. When it comes to performance ratings, my personal belief is that they are antiquated as well. Performance ratings (labels) are more detrimental than positive. A recent edition of HR Magazine states that performance ratings cause a number of unhealthy symptoms in employees. Some such symptoms are: high anxiety in terms of being ranked, fixed mindsets which inhibit learning, and reluctance in risk taking which discourages employees from creating stretch goals. No matter how you look at it, you are placing a label on performance. You’re trying to measure and label something that can’t necessarily be quantified in that manner in an attempt to compartmentalize it into a clean, neat, little box. This is an unrealistic type of marker that can be both detrimental and under motivating. The true value, richness, motivation and inspiration come through conversation – not a superficial label. Ratings detract from managers having real conversations. It’s easy for me to say, ‘Hey Chris, this year you’re a ‘meets expectation’. In many cases, it’s easier for a manager to lean back on a label instead of really describing behaviors, achievements and successes, missed opportunities or developmental opportunities. Unfortunately many managers lean back on the label to describe and quantify an employee’s performance which ultimately diminishes the conversation.
KS: Basically taking a whole person, which is obviously a qualitative value and putting it down as simplistic as possible through quantitative data.
CL: At Campbell, our focus is on rewarding exceptional contributions that drive company, business or functional performance. Our managers know who their key contributors and underperformers are without a rating scale and are fully capable of rewarding performance accordingly. It does require more discretionary effort, but with the right training, coaching and guidance, managers are completely able to differentially assess their talent.
KS: What are your top priorities for 2016?
CL: One of our top priorities is what we’ve been discussing here today. Delivering the next evolution of performance management by designing a contemporary system where we:
• Set the bar high with ambitious objectives
• Inspire higher levels of performance to achieve great things
• Provide ongoing, real-time, anytime, continuous coaching and feedback on a regular basis
• Assess performance based on impact, outcomes and contribution
• Reward top performance
• Drive accountability